biaggio

http://seekingalpha.com/article/272958-bruce-berkowitz-beat-the-pack-by-breaking-from-it?source=yahoo -summary of recent presentation for fans of BB. Talk about why he likes BAC

I think you guys will do well with MSFT. The group of guys on this thread bullish on MSFT have a great track record here. If it wasn t for the fact that i.MSFT is outside my circle of competence. and ii I love Mac products + find PC stuff annoying (pop ups, need for anti viral soft ware etc) I wouild be buying MSFT just on the arguments presented here. I am watching + pulling for you guys. re insider buying...you cant expect W Gates with the millions shares to be buying (his shares are worth billions, buying a hundred million dollars will hardly move the needle, besides he is trying to spend the $$ on important issues). Prem + WEB diversify within the investment vehicles BRK, FFH that is why we love them so.

Thanks woodstove for sharing. Woodstove, your "ops file" is that for operations? I was wondering what you put in that? I have been thinking of starting an "oops file", a file looking at the mistakes/errors I have made. I think my biggest errors have been in hesitating, and procrastinating. I have copied your quote + will read it from time to time. " I read it or listened to it at 21 and now get so much more out of it. Interesting..." -someone once said that when you are young one has all the answers. As you get older you have all the questions. Or something like that.

I was impressed and liked Einhorn initially. I think his recent public presentation first with St Joe and recently MSFT make him look bad (obnoxious). Even if he is right I think some things should be kept quiet or done in private .

Tom, I think you are way ahead of most 21 year olds. You are way ahead of most people I deal with. You are certainly way further than I was at 21. It s funny, I have everything I have ever wanted , dreamed and envisioned. I like what I have . I am happy. I will be turning 49. Sometimes I wish I would have wanted more or dreamed of more...not that I want more things, but sometimes I feel like I could have achieved more/done more. I certainly had no type of mental model or approach as described in the book. I think most people underachieve (not anyone on this board, I am talking in society). They do not have any belief in themselves, have quit dreaming long ago or are just floating around trying to get something for nothing. It's sad for them. Its more fun trying to achieve,to contribute. I never read the book The Secret. I bought the electronic version of "Think and grow rich" + it certainly is not 400 pages, I wonder if it is the original version (I bought the cheapest one, not knowing there was a free version). I have not had time to do much reading so I am still only 30% thru the book.

maybe they could develop a universal charger, so if out run out of power the store could let you plug into their charger

I am also trying to learn re use of options. If we use MSFT options as an example: Jan 2013 call option at strike price of $25 selling for $2.60 For $2.60 you have the right to buy MSFT for $25 in Jan 2013. Current price of MSFT:$24.19 To me it looks like you win if the the common sells for greater than $25 + $2.60 or $27.60 (which is an appreciation of ~14% for the common over the next 18 mo.) OR Is the idea that the option will move more before the expiration as the price of the common approaches or exceeds $25, with the option of selling the option in 12 months (or some other time before expiration) and buying the options expiring in 2014 (ie. rolling over the option) or just selling for cash , say for instance if all of a suddenly it pops to $35 for an example. Then the option will likely be worth at least $10 ($35-25) which is almost 400% appreciation of the option vs a 36% move in the common. Downside is that if you hold option til expiry then if not at $25 then you lose all your capital, but if you roll it over then you can buy yourself more time for MSFT to appreciate? Any enlightenment would be appreciated.

I recently bought it thru amazon...only $0.78. I am about 1/4 thru it. Good book especially for young adult... I am thinking about buying a cop for all my kids(though I don t know if they will read it), as I wish I would have read it when I was 20.

http://wealthtrack.com/video_player-05.html Great Investor, David Herro, is the Morningstar’s International Stock Fund Manager of the Decade. The contrarian minded manager of three Oakmark International Funds discusses why he is finding value in some of the world’s most challenging markets. Good interview

Microsoft Using Free Xbox to Spur PC Sales, But Will it Work? Read more: http://www.benzinga.com/news/11/05/1098342/microsoft-using-free-xbox-to-spur-pc-sales-but-will-it-work#ixzz1MpxQ7P4v Starting May 22, Microsoft (NASDAQ: MSFT) will begin giving away free Xbox 360 consoles (the $200 four-gig version) to students who spend $699 or more on a new Windows PC. According to Mashable, this deal – which will be available at Best Buy (NYSE: BBY), the Microsoft Store, Dell.com (NASDAQ: DELL), and HP.com (NYSE: HPQ) – was announced on the Windows Blog today. Interesting. My kids are Mac fans, but if their x box broke, then their parent maybe interested in this deal.

What's going to work in deflation or mild deflation: I am going to guess - dividend paying companies that we(consumers) can t do without-utilities, telecom, cable cos, healthcare related-drugs. Bonds are suppose to do well in this scenerio but it seems that this is currently priced into the price of bonds. Cash is a good idea

http://www.gurufocus.com/StockBuy.php?symbol=SHLD&rec=1 B. Berkowitz increased his holdings by 9% around $80. CEO also bought around this price. How would retail + specifically act in a deflation scenerio mentioned in other threads?

this may be a lesson for me in the pitfall of investing in a value play based on a sum of parts. I think I may have heard of a similar warning from Seth Klarman in a lecture to UWO business students (I maybe should have listened more). I reviewed my written reasons for investing in SHLD (I believe the various idea is mentioned throughout this thread by others). I am going to be patient with a fairly small allotment.

http://www.searsholdings.com/invest/ Sears Holdings Reports First Quarter Results Consistent With Previously Provided Guidance May 19, 2011 HOFFMAN ESTATES, Ill., May 19, 2011 /PRNewswire/ -- Sears Holdings Corporation ("Holdings," "we," "us," "our" or the "Company") (NASDAQ: SHLD) today reported its first quarter 2011 results. In summary, we reported: Net loss attributable to Holdings' shareholders for the quarter of $170 million, or $1.58 per diluted share, in 2011, compared to net income of $16 million, or $0.14 per diluted share, in 2010; Adjusted loss per diluted share for the first quarter of $1.39 in 2011 and adjusted earnings per diluted share of $0.16 in 2010; and Adjusted EBITDA for the quarter of $63 million ($78 million domestic and $(15) million at Sears Canada) in 2011 and $304 million in 2010. These results were within our previously announced range of net loss attributable to Holdings' shareholders of between $145 million and $195 million, or between $1.35 and $1.81 per diluted share and Adjusted EBITDA of $25 million to $105 million.

wasn t his point that we will get a collapse in asset prices that are supported by QE2, once QE2 funding is withdrawn if we don t have private expansion credit + or public spending money? should we look at our holdings and ask ourselves how much of their economics are supported by QE? and/or just stick with very high quality companies selling products that we cannot do without?

Thanks Beerbaron

Thanks for posting. What are folks doing with their portfolio? Will buying a dollar (common equity) for $0.50 still work? Buy more FFH?

http://www.businessinsider.com/munich-re-fires-senior-execs-for-hosting-a-kinky-sex-prostitute-party-2011-5 Insurance Company Fires Execs For Hosting Kinky Sex Party With Company-Paid Prostitutes What are people thinking? Wow.

Myth thanks for the post. I enjoy listening to J Rogers. I like the way he talks. I gotta believe that in dollar terms he is going to be right eventually. Amusing that the government wants to punish the energy companies (with more taxes?) because they are perceived as gouging the public-yet this is surely to lead to higher energy prices. If they continue to print money + devalue it, will it not be better to own companies with oil reserves rather than cash? I don t understand why canadian oil sand companies are selling for $2-4 per barrel of oil of reserves e.g SU has 27 billion of barrel of oil reserves selling for $50 B + ~ $14 B or $64b= 64/27 or $2.37 per barrel. With current cost of $38-42 per barrel why would you not want to own these? I would rather own a barrel of oil at $2-3 than having $1 in cash in the bank Myth, you work in the oil industry, there must be something wrong with how I am looking at things?

I have a commercial loan coming due. I have been paying a variable rate of prime. Would anyone here lock in long term mortgage to lock in low interest rate? -history shows that one is better off sticking to variable interest rate, but interest rates are so low What rate would be attractive for the next 5-10 years?

Shane, you can always look and see what price increases the company is putting in for their products... There are a couple companies that I own that quote annually what their price increases have been. For instance I recently bought some WB.TO -on their recent earnings call indicated that they increased prices on their resort tickets 10% in this past year without losing any visitors- It seems that UNH always quotes 7% price increase every year-they sometimes lose members but they remain profitable.

"What metrics do you all find useful in determining pricing power?" I am no expert at all, but I read + saved the following (my apology to whomever I learned this from,I can t remember who it was)-they are metrics for durable competitive advantage but some metrics maybe useful for your purpose. If a company is maintaining its advantage then either it has got pricing power or is able to manage its expenses to maintain the various metrics ie you re looking for good/great businesses: Durable Competitive Advantage Summary Income Statement (d.c.a = durable competitive advantage) Gross Profit Margin >40% = D.C.A. <40% = competition eroding margins <20% = no sustainable competitive advantage Consistency is Key SG&A (SGA as % of gross profit) < 30% is fantastic Nearing 100% is in highly competitive industry Consistency is Key Depreciation (depreciation costs as a % of gross profit) Company with moat tend to have lower % Interest Expenses (interest expenses relative to operating income) Durable competitive advantage carry little or no interest expense. Buffett's favorite consumer products have <15% Company with lowest ratio of interest to Operating Income = competitive advantage. Varies widely between industries. Net Earnings (% net earnings to total revenues) Net earnings history >20% = Long Term moat < 10% = in highly competitive business consistency and upward LT trend EPS 10-year period showing consistency and upward trend. Avoid erratic earnings pictures. Consistency = sign products don’t need to change. Upward trend = strong Balance Sheet Cash and Equivalents lots of cash and marketable securities + little debt Test to see what is creating cash by looking at past 7 yrs of balance sheets Inventory Look for an inventory and net earnings that are on a corresponding rise inventories that spike up/down are indicative of competitive industries prone to (boom/bust) Net Receivables consistently shows lower % net receivables to gross sales than competitors d.c.a. no need to offer generous credit Goodwill increase in goodwill over number of years assume because company out buying companies >BV d.c.a.’s never sell for less than BV LT Investments can have valuable assets on books at valuation < market price (booked at lowest price) tells us about investment mindset of management (Looking for d.c.a.?) Intangible Assets Internally developed brands not reflected on BS Total Assets + ROA (Measure efficiency using ROA) Higher return the better (but: really high ROA may indicate vulnerability in durability of c.a.) Capital = barrier to entry ST Debt financial institutions. Buffett shies from those who are bigger borrowers of ST than LT debt LT Debt Due d.c.a. need little or no LT debt to maintain operations Total CL + Current Ratio higher the ratio, the more liquid, the greater its ability to pay CL d.c.a.’s don’t need ‘liquidity cushion’ so may have <1 LT Debt LT debt load for last ten yrs. ten yrs w/ little LT debt = d.c.a. earning power to pay their LT debt in <3/4 yrs = good candidates Total Liabilities + Treasury Share-Adjusted debt to Shareholder Eq Ratio If <.80, Good chance company has d.c.a. Preferred + Common Stock in search for d.c.a. we look for absence of preferred stock Retained Earnings Rate of growth of RE is good indicator Treasury Stock presence of treasury shares and a history of buyback are good indicators that company has d.c.a. convert –ve value of treasury shares into +ve and add shareholder eq. Divide net earnings by new shareholders eq. give us return on equity minus dressing. Return on Shareholder equity d.c.a. show higher than average returns on shareholders equity If company shows history of strong net earnings, but shows –ve sholder equity, probably d.c.a. because strong companies don’t need to retain Cash Flow Statement Capital Expenditures historically using <50% then good place to look for d.c.a. <25% probably has d.c.a. Add up total cap exp for ten-yr period and compare w/ total net earnings over period. Stock Buybacks indicator of d.c.a. is a history of repurchasing/retiring its shares Look at cash from investment activities. “Issuance (Retirement) of Stock, Net” 


why would he not use FCF from SHLD to purchase GAP or other undervalued retailers?

wow, business meeting was only 18 minutes, my kind of meeting. I would love to make a trip to attend one day (soon?) but wonder if it is worth it.

maybe she had evidence of the racqueteering i.e maybe she knew something that she wanted to give to Fairfax to hurt her spouse.